2021 (4) TMI 1222 - HC - GST

Bail application - evasion of tax - inculpatory statement of the applicant under duress and coercion - It is submitted that the present offence is triable by the Magistrate and considering the burden of work and pending cases in trial court the applicant may be released on bail as the applicant is in jail since 14.12.2020 - HELD THAT - Keeping in view nature of allegations, gravity of offences, role attributed to the accused, without discussing the evidence in detail, at this stage, this Court is inclined to grant regular bail to the applicant. The applicant shall deposit an amount of ₹ 2,00,000/- before the State Tax Officer and on depositing the aforesaid amount and producing appropriate document with regard to the depositing of the amount the applicant is ordered to be released on regular bail and further the applicant shall also file an undertaking to deposit the remaining amount of ₹ 13,00,000/- within the period of eight weeks - application allowed.

Summary

Issues:
Application for bail under Section 439 of the Code of Criminal Procedure in connection with alleged offences under Sections 132(1)(a) of the Gujarat Goods and Services Tax Act, 2017.

Analysis:
The applicant challenged the Arrest Memorandum dated 14.12.2020, arguing that the arrest was based solely on a co-accused's statement, which is not admissible evidence. The applicant claimed the investigating agency obtained the statement under duress, without establishing the liability for the alleged demand. The applicant contended that the tax evasion amount of ?6.31 crores lacked supporting details, and the case involved clubbing demands from 13 entities, which was unusual in tax law. The applicant highlighted being in jail since the arrest and expressed readiness to deposit a reasonable amount suggested by the Court.

The respondent opposed bail, labeling the applicant as a key figure in a tax evasion scheme involving 13 fictitious firms amounting to ?6.31 crores. Despite the gravity of the offence, both parties did not press for a detailed order. The Court, after reviewing the case materials, considered various factors, including the applicant's detention duration, the nature of allegations, and the lack of evidence tampering risk. The Court also noted the applicant's willingness to deposit a specified amount and referred to the Supreme Court's precedent in Sanjay Chandra vs. CBI, (2012) 1 SCC 40.

Consequently, the Court granted bail to the applicant, requiring a deposit of ?2,00,000 before the State Tax Officer, with a further deposit of ?13,00,000 within eight weeks. Failure to comply would result in automatic bail cancellation. The applicant was released on bail with conditions such as surrendering the passport, regular police station visits, and residence updates. Breach of conditions would empower the Trial Court to take appropriate action. The Court emphasized that trial courts could adjust the conditions as per legal requirements and instructed the Registry to notify relevant authorities about the bail order.

In conclusion, the Court allowed the bail application, setting specific monetary deposits and conditions for the applicant's release, emphasizing compliance and legal consequences for any breaches. The judgment underscored the importance of following the conditions and respecting the legal process throughout the trial.